The Grill: ADP's CIO on the granddaddy of SaaS

At business-to-business hosted services provider ADP, corporate vice president and CIO Mike Capone practices what he preaches. Not only does the company consume its own SaaS offerings, from payroll processing to talent management, but it also uses third-party services every chance it gets. Capone may have started out in IT, but he spent most of his 24 years at ADP on the business side before taking on the CIO role. Here he talks about how mobile, consumerization and big data are keeping pressure on IT, and why businesses must use technology to innovate, even when it voids existing business models.

Mike Capone

Groupon. They took all the things that are hot and made a business out of them.Is there something that most people don't know about you? My father was one of the first people to carry the title of CIO. He went to school for Cobol and worked his way up at JC Penney.What's your favorite vice? French food. They use a lot of butter.What do you do during off-hours? Travel. I love seeing the world.What are you currently reading?Super Sad True Love Story: A Novel, by Gary Shteyngart. It's a satire on where the world is going in terms of all this transparency and lack of privacy.

What career path did you take on your way to the CIO job? I went to a liberal arts college, and IT was a way to pay the bills right out of college. I quickly gravitated toward business, got an MBA, and left IT. I was general manager of our global outsourcing business. Then, three and a half years ago, our CTO said, "We're thinking of naming our first CIO in company history. We think you'd be a great candidate."

Do you see your business background as an advantage in your role as CIO? It's been incredibly valuable not just in terms of how I think, how I run my organization and how I prioritize, but also in terms of the cred I have with my peers. They know I've walked in their shoes.

ADP was a pioneer of the software-as-a-service model.How has that business changed? The most fundamental shift I've seen is the consumerization phenomenon. For many years, our clients -- the people who I support both internally and externally -- were people who were paid to come in and use our systems. Sometimes those IT systems were fairly ugly, but it mattered less because people had to use them. Now many of the people we are dealing with are end users because we're doing more user self-service. So the mobile and social components of this have taken off. People expect an excellent experience with technology. That puts a lot of pressure on IT on the usability and innovation front. We have to make sure we're keeping up.

How does ADP's legacy as the granddaddy of SaaS affect how you do IT internally? We push out as much as we can to the cloud, including expense reporting, procurement and salesforce automation. Every conversation I have starts with, "Can we do this in a SaaS model?" It takes a lot of convincing for me to do something internally.

What aren't you willing to move to a SaaS provider? Back-office financial systems. We're waiting for that industry to mature. But I would not be surprised if in another year or two we're having a conversation about why that can't be pushed out into an on-demand model.

What other cloud services are you using? We've already built an internal cloud both for our clients and for all of the services we provide to our R&D organization and our business community. R&D people can provision their own servers. And even though we have two Tier 4 data centers, we still leverage infrastructure as a service. We use Amazon [EC2], for example, for some of our mobile development so that the ecosystem of partners we work with are in the cloud, not coming into our infrastructure.

What technology projects does your company plan to roll out in the next 12 months? We're going to roll out analytics to our clients. Not only will they get their data back and see some pretty cool visualization analytics, but they will be able to benchmark against other companies. Think of it as a kind of workforce index that an HR person can have on their desktop. So for example, you can see if you're below market for a given job code, and there will be a dashboard you can drill into to get additional benchmarks.

What is the key to keeping ahead with the technology? We preach that change is inevitable and we keep the pressure on all the time. When you're successful, the pressure is not there. But everyone remembers that IBM was the most profitable software company in the world and then two years later they were recording a loss. I also use the Kodak example all the time. We want to keep that in front of people and create a sense of urgency, even if our financial metrics don't show any urgency.

How has technology changed your business model? We're putting more and more stuff on mobile apps, which eats into other parts of our business because we don't charge for those apps. For example, we used to charge for delivery of pay slips and reports. Now it's all online. These are changes in the business model that we have to get used to.

What's your biggest pet peeve in this business? It's this whole concept that the cloud is something new. We've been doing this for a long time and this is just another way of transacting business. All of the hype is driving me up the wall, quite frankly.

What emerging technologies are you most excited about? The big data technology that's come out, the Hadoops of the world. That opens up opportunities in terms of our ability to provide analytics. We're capturing what people are doing on our websites, in our applications and mobile apps, and using that to predict what they're going to do next. We now have the ability to process and analyze all of that data so quickly and cheaply. This, I think, is going to be a big game-changer.

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